April 23 (Bloomberg) -- Coffee picker Hector Gonzalez says he feels personal pain as he watches leaves stripped off plants from a fungus infecting 70 percent of the crop on the Salvadoran farm where he works.
“The hurt of losing this work is like losing your life,” Gonzalez, 32, said in a phone interview. “The hills look like a desert, like a fire came through.” His farm’s harvest, which once employed thousands of workers, now requires about 100, he said.
The International Coffee Organization estimates 437,000 workers in Central America will be jobless after an outbreak of coffee rust this year and more will be affected next season. From Guatemala to Panama, governments are boosting aid to fight the disease and keep workers from migrating to cities or north toward the U.S. The fungus wiped out as much as 25 percent of the region’s coffee crop this season, according to World Coffee Research, an industry association.
About 2 million of the 43 million inhabitants of Central America are directly employed by the coffee industry, according to the ICO. In his community of 90 households, Gonzalez said nine unemployed coffee pickers have left for the U.S. since January, and 15 have gone to the capital, San Salvador, to find temporary work or join the army.
To discourage workers in neighboring Guatemala from deserting the countryside, the government on March 11 announced a temporary employment plan that provides work on highway maintenance and reforestation projects. Those joining the program earn 40 quetzales ($5.13) a day compared with the minimum agricultural wage of 71 quetzales.
Coffee provides 504,000 direct jobs in Guatemala, according to the ICO. Exports from the current harvest will drop to $350 million from $960 million from the 2011-2012 crop, said Nils Leporowski, president of the country’s National Coffee Association.
In Honduras, the region’s biggest coffee producer, the government and national coffee institute are employing some 100,000 workers made jobless by rust to rehabilitate farms by replacing damaged plants. The government has pledged $85 million to fight the disease, which it says could shave 1.7 percent off the country’s $17 billion annual gross domestic product.
“Our hope is that all the workers who lost their jobs will be able to continue working in coffee,” said Victor Hugo Molina, general manager of the Honduran Coffee Institute, in a March 21 telephone interview. “By reconstructing damaged farms, they remain in the coffee industry.”
The outbreak can be contained through the use of fungicides. Industry organizations are also urging local governments to provide more food and aid to rural communities affected by the disease.
“This is not just about whether you can make a profit this year, we’re talking about food security in rural areas,” Mauricio Galindo, head of operations at the London-based ICO, said in a March 18 phone interview.
The financial impact of rust losses is exacerbated by a drop in international prices as greater supplies flow to the global market. The price of arabica beans, the most common variety in Central America, has decreased by 18 percent since July. Even with the outbreak, global supplies of the beans have increased, led by Brazil, which boosted exports 11 percent in March from a year earlier.
Ric Rhinehart, the executive director of the Specialty Coffee Association of America, said some buyers are concerned that emigration will leave Central America without enough pickers once output starts to recover. Major members of the association, including Green Mountain Coffee Roasters Inc., favor the use of arabica coffees and typically buy a sizable portion of their beans from Central America, he said.
Representatives from Seattle-based Starbucks Corp. and Waterbury, Vermont-based Green Mountain participated in a summit on coffee rust held last week in Guatemala City.
“Our greatest fear is that farmers will be displaced and that their livelihoods will remain uncertain,” Rhinehart said in a March 25 interview from Long Beach, California. “The futures market in New York will continue to absorb the news without reflecting the terrible situation, but cash prices will soar for the coffees produced in the region. The keen impact will be felt next year.”
In a region struggling with violent crime, the additional insecurity of unemployment and increased poverty can undermine stability. El Salvador and Honduras lead the world in murders with rates more than 12 times higher than the U.S., the United Nations said in its 2011 Global Study on Homicide.
At the Hermanos en el Camino shelter for Central American migrants in Ixtepec, Mexico, 270 miles (430 kilometers) from the Guatemalan border, Jose Alberto Donis Rodriguez compared the coffee rust epidemic to the destruction of corn crops by Hurricane Mitch in 1998 and Hurricane Stan in 2005. Recently unemployed workers who have family or other connections with workers who migrated to the U.S. after those disasters may get help finding jobs there, Donis said in an April 1 telephone interview.
“Most people go with the intention of returning,” Donis said. “They want to stay two or three years to earn money. But the conditions in their country of origin are the same so they end up staying.”
Gonzalez, who says he understands why people leave for the cities or the U.S., described his sadness at the rust outbreak and its impact.
“When you’re on the farm, you take care of it as if it were your own garden,” he said in an April 12 interview from his plantation near the Guatemalan border. “I take pride in my work. We take care of the coffee, because that’s what we live by.”
To contact the reporters on this story: Anna Edgerton in Miami at firstname.lastname@example.org; Adam Williams in San Jose, Costa Rica at email@example.com; Marvin G. Perez in New York at firstname.lastname@example.org